Hands on: Wesabe helps you pinch pennies, avoid bank fees

Wesabe is another web-based financial organization service (like Mint.com) …

Wesabe is another competitor in the web-based financial organization market, offering tools to track bank and credit card accounts and visualize spending. The service stands out with innovative comparison tools for things like retail store spending habits, as well as a community that shares tips on how to save money. A new "Cutback Tool" helps users to save even more money by helping to sniff out and eliminate recurring monthly expenses. We finally decided to pinch some pennies with Wesabe and also spoke with the company's CEO, Marc Hedlund.

At is core, Wesabe's functionality is much like Mint.com and Quicken Online, some of the differences between which we explored last October. The service is free to use and can automatically import transactions from over 6,000 banks and credit cards (loans and investments are not yet trackable), though users can also manually upload a handful of financial industry file types such as OFX and QIF. Wesabe presents an Accounts dashboard area upon login with a recent tally from each account, as well as panels for customizable budgets, called Spending Targets, and spending trends.

Ditching the constricting traditional paradigm of "keywords," Wesabe allows transactions to be organized by tags. Multiple tags can be applied to each transaction for your visualization pleasure, though Wesabe does not appear to offer any automated or intelligent tagging to minimize the manual labor that is otherwise required.

Still, this is something that can only improve over time, and these tags come in handy in Wesabe's other tools. The transaction management area, however, feels a bit clunky, since not much more than a single transaction will fit on our MacBook's 800-pixel-tall display at a time; there has to be a better way to organize this area, and Wesabe's aforementioned competitors both offer good examples.

It's easy to set up quick tag-based budgets and visualize them in various ways. Before you ask, though, no: I don't spend $80 on alcohol each month. At least I think I don't

The Spending Targets area of the main account page is quite useful, as it allows for visualizing monthly tag-based budgets in a variety of ways. A choice between bar graphs, pie charts, and simple number lists allow users to keep track of spending in whatever way works best.

Tips, Goals, and Groups

Wesabe also focuses on community interaction with three key features: Tips, Goals, and Groups. Tips is one of Wesabe's most interesting innovations, as it scans imported transactions for retailer names, then displays comparisons with similar retailers, satisfaction ratings, and advice from the rest of the Wesabe community. Wesabe CEO Marc Hedlund assured Ars that, unlike competitors such as Mint.com, none of these retailers are paid placements. They are simply built from a database of transactions, user-contributed advice, and ratings generated from Wesabe's two-plus years of existence.

If we can learn anything from this particular Wesabe Tip, it is that
these carriers are equally not recommended by Wesabe's users

This Tips tool is great to either find ways to save money with a competitor, or make the decision to stick with a current provider with a significantly higher approval rating. For a smart bit of polish, extra manufacturers can be added manually to broaden the scope of the comparison.

Goals are kind of like Spending Targets in that they are used to track spending in a specific category tag. However, Wesabe once again harnesses its community by allowing members to contribute Goals that are of a higher ideal than just watching one's alcohol intake for the month, such as "Buy a Home," "Pay off Credit Cards," or "Stop Paying Overdraft Fees." Goals can track spending across multiple tags (unlike Spending Targets), you can see how many other members have subscribed to the same goal, and you can even get in touch with them to share tips and experience.

Groups are Wesabe's take on forums, and naturally, virtually all of the topics cover ways to save money and find alternatives when slashing budgets. There isn't much spectacular to talk about here, other than that the forums have a pleasant design and most members really do seem hell-bent on saving every penny possible.

Wesabe's latest new feature, a Cutback Tool, performs some simple analysis across imported transactions to pick out monthly fees such as gym memberships or bank fees. The Cutback Tool displays these fees along with their merchant and a potential yearly savings calculation. If you tell Wesabe that you want to cut back on a particular expense, it will tell you how long you have until the next bill, and display cancellation reminders until you make the call.

This is a brilliant feature that I must personally thank for helping me to track down a monthly $11.99 subscription to Emusic.com that I don't remember agreeing to. Of course, the Cutback Tool can only see as far back through your transactions as your bank's policies allow, so you may need to wait a couple months before it sniffs out any erroneous fees or services you just don't need anymore.

No ads or marketing

After giving Wesabe a full test, we couldn't help but notice an utter lack of advertising or other overt monetization efforts. There are no AdSense ads or offers to switch credit cards to get a better interest rate, and that was one of our first questions for Wesabe's CEO. "We don't currently generate any revenue," Hedlund replied, "and we specifically made the decision to stay away from Mint.com's model to avoid unhelpful marketing. I was kinda shocked that they were advertising to switch your money over to Washington Mutual the week before it failed—that's not in our users' interests."

Wasabe does not even sell anonymous demographic data about its users, though it has provided custom application services to some clients, such as a UK bank that wanted Wesabe-like tools for its users.

Wesabe was founded in November 2005 and launched to the public in 2006. Not wanting to play "the number inflation game," Hedlund declined to say exactly how large Wesabe's user base is. But "we are well within hundreds of thousands of users now," Hedlund explained, "and we've been growing at an average rate of about 20 to 35 percent every month."

Soon, though Hedlund would not specify when, Wesabe is gearing up to introduce some "freemium" services designed to add value in exchange for a low monthly or yearly subscription fee. A primary feature of this upcoming service is a bill payment mechanism that will allow users to manage bills and receive other notifications across all their accounts. If Wesabe pulls it off soon, it could beat Mint.com and Quicken Online to the holy grail of transitioning from a financial organization service to an online financial management tool.

"The challenge, of course, is that many banks provide those services for free," Hedlund admitted. "But we have some ideas on how to make this experience that much better at Wesabe to make a low fee appealing enough to users that want it."

One of the potential values for users who are frequently plagued by overdraft or late charges, Hedlund says, is that Wesabe's freemium services are being designed largely to help avoid these fees. "You may spend $60 a year on a membership with us, but you'll end up not having to pay hundreds, or even thousands, of dollars in fees that collectively make up nearly one third of the business model of US banks."

Saving money and avoiding fees in tough times has led to a major surge in financial management and organization services like Wesabe. Though the site features some clunky design and may not be as feature-packed in a few areas as its competitors, Wesabe definitely holds its own with some unique tools for organizing finances, a strong conscientious community, mobile access for iPhone and other cell phones, and a collection of uploading tools for Firefox, Mac, and Windows (and even an API). The new Cutback Tool is a great addition and makes Wesabe an even stronger option for those looking to pinch as many pennies as possible.